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The vast majority of all web businesses founded since the dot com era have had ads as their business model, because of either, failure to get a universal, easy

The vast majority of all web businesses founded since the dot com era have had ads as their business model, because of either, failure to get a universal, easy to use, micropayment system standardized at the start of the Web, or because people came to experience surfing to be transaction-cost free, most people are unwilling to pay for web services, and if you think ads are annoying, how annoying is signing up for an account, inputting your credit card, and buying a service? It would be nice if people would pay for newspapers, blogs, Search, email, Facebook, et al, and in some cases, in Apple iOS, people seem culturally prone to pay, but for the most part, attempts at pay walls have failed. My only point is, if you focus only on the revenue source, you fail to differentiate between what the businesses actually do. If a school were to be funded by billboards on school buses, would you say it's an elementary school, or an advertising company? If the source of revenue actually drives what the company uses that revenue for, I think you have a point, I think it is arguable that Google reinvests most of profits in ads. If you look at Android or Chrome, they are both large projects, that did not start out to generate ad revenue, but both to improve mobile and the web, and to build a defensive moat that would prevent a competitor from controlling the on-ramps. Indeed, it seems Apple iOS generates far more ad revenue, so getting people to use Android actually reduces ad revenue. :)

taligent 14y ago
You clearly don't understand Google. They earn over 95% of their revenue from SELLING advertising. The other parts of their business e.g. search, mail, maps consume advertising like other web businesses. You are trying to equate the selling from the consumption which is illogical.
- jan_g 14y ago
  Yup, but you could say that for many IT companies. Why? Because most of them are getting money by utilizing advertising in one form or another. Is Twitter an advertising company? Is Facebook?
  - flyinRyan 14y ago
    >Is Twitter an advertising company? Is Facebook? Are these serious questions? Of course they are. What else?
    - jan_g 14y ago
      I'm questioning the need to constantly repeat the obvious. Just about every thread that smells of Google gets derailed by meta conversation about advertising. For what is worth, I still consider these companies to be heavily tech oriented, despite their source of revenue. They give bread and butter to people like me - developers. Whereas your run-of-the-mill traditional advertising company doesn't.
      - chii 14y ago
        banks are very heavily tech oriented (as in they use a lot of tech and also make their own tech). and yet you won't call a bank a tech orient ed company because a company's model determines the 'orientation', not what sort of tools they use. many people agree that Google is an advert company. it just that they are different from the traditional Madison avenue style ad company. no one is saying that being an ad company is bad. nor are they disallowed to invest in tech. but they are not like the old research institute like the old palo alto xerox style company.
- cromwellian 14y ago
  Is Apple a phone carrier not a consumer electronics company, since a huge chunk of their revenues come from carrier subsidies that lock consumers into multiyear contracts that obfuscate the true costs (e.g. $2200)? Google is spending so much of its revenue on other ideas like Glasses and self-driving cars, not for PR purposes, although it does garner positive PR, but because getting 95% of you revenue from a single source is risky in the long term, and they are obviously trying to diversify. If you want to describe Google as an advertising company, go ahead, but that is a grossly under-descriptive term of what the company truly does, as poor a description as calling Amazon just a retail store.
- jkn 14y ago
  Search, mail and maps consume advertising in the same way that newspaper and magazine articles do. Or Facebook pages, or TV series. Roger Federer earns 85% of his revenue from advertising[1]. Other parts of his business (tennis playing) consumes advertising (displaying Nike logos on his clothes). What is the insight here? This tells something about how our economy works. It doesn't tell us much about the New York Times, Facebook, NBC, Roger Federer and Google. If you want to understand a company, you cannot limit yourself to a look at the sources of revenue. You have to go deeper and ask what makes it successful. Good newspaper articles. Good tennis play. Good web services and an open platform for mobile devices. [1] http://spakovas.blogspot.com/2012/06/top-10-highest-earning-athletes-of-2011.html http://spakovas.blogspot.com/2012/06/top-10-highest-earning-...
OGinparadise 14y ago
If you look at Android or Chrome, they are both large projects, that did not start out to generate ad revenue, but both to improve mobile and the web, and to build a defensive moat that would prevent a competitor from controlling the on-ramps How sweet of you, must be the coolaid :). Google controls what % of mobile advertising? Where would that be without Android and the many Google Apps that come as a package? Defensive moat or trying to get more ad dollars by learning location, habits and everything else? Google's business model: Show mostly, to almost all ads to people searching for information that can be monetized. You went from 1 ad on the right to 5 on top, 10 on sides, 2 on the bottom and then another 10 Google pages. That ad money is being passed as price increase to consumers. Enjoy your monopoly, but you will be disrupted.

taligent 14y ago

You clearly don't understand Google. They earn over 95% of their revenue from SELLING advertising. The other parts of their business e.g. search, mail, maps consume advertising like other web businesses. You are trying to equate the selling from the consumption which is illogical.

jan_g 14y ago
Yup, but you could say that for many IT companies. Why? Because most of them are getting money by utilizing advertising in one form or another. Is Twitter an advertising company? Is Facebook?
- flyinRyan 14y ago
  >Is Twitter an advertising company? Is Facebook? Are these serious questions? Of course they are. What else?
  - jan_g 14y ago
    I'm questioning the need to constantly repeat the obvious. Just about every thread that smells of Google gets derailed by meta conversation about advertising. For what is worth, I still consider these companies to be heavily tech oriented, despite their source of revenue. They give bread and butter to people like me - developers. Whereas your run-of-the-mill traditional advertising company doesn't.
    - chii 14y ago
      banks are very heavily tech oriented (as in they use a lot of tech and also make their own tech). and yet you won't call a bank a tech orient ed company because a company's model determines the 'orientation', not what sort of tools they use. many people agree that Google is an advert company. it just that they are different from the traditional Madison avenue style ad company. no one is saying that being an ad company is bad. nor are they disallowed to invest in tech. but they are not like the old research institute like the old palo alto xerox style company.
cromwellian 14y ago
Is Apple a phone carrier not a consumer electronics company, since a huge chunk of their revenues come from carrier subsidies that lock consumers into multiyear contracts that obfuscate the true costs (e.g. $2200)? Google is spending so much of its revenue on other ideas like Glasses and self-driving cars, not for PR purposes, although it does garner positive PR, but because getting 95% of you revenue from a single source is risky in the long term, and they are obviously trying to diversify. If you want to describe Google as an advertising company, go ahead, but that is a grossly under-descriptive term of what the company truly does, as poor a description as calling Amazon just a retail store.
jkn 14y ago
Search, mail and maps consume advertising in the same way that newspaper and magazine articles do. Or Facebook pages, or TV series. Roger Federer earns 85% of his revenue from advertising[1]. Other parts of his business (tennis playing) consumes advertising (displaying Nike logos on his clothes). What is the insight here? This tells something about how our economy works. It doesn't tell us much about the New York Times, Facebook, NBC, Roger Federer and Google. If you want to understand a company, you cannot limit yourself to a look at the sources of revenue. You have to go deeper and ask what makes it successful. Good newspaper articles. Good tennis play. Good web services and an open platform for mobile devices. [1] http://spakovas.blogspot.com/2012/06/top-10-highest-earning-athletes-of-2011.html http://spakovas.blogspot.com/2012/06/top-10-highest-earning-...

OGinparadise 14y ago

If you look at Android or Chrome, they are both large projects, that did not start out to generate ad revenue, but both to improve mobile and the web, and to build a defensive moat that would prevent a competitor from controlling the on-ramps How sweet of you, must be the coolaid :). Google controls what % of mobile advertising? Where would that be without Android and the many Google Apps that come as a package? Defensive moat or trying to get more ad dollars by learning location, habits and everything else? Google's business model: Show mostly, to almost all ads to people searching for information that can be monetized. You went from 1 ad on the right to 5 on top, 10 on sides, 2 on the bottom and then another 10 Google pages. That ad money is being passed as price increase to consumers. Enjoy your monopoly, but you will be disrupted.